The Value Of Outsourcing
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Thursday, June 30, 2005 |
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Weighing the Pros and Cons
For many, the decision to outsource begins with exercise of weighing the time and expense of doing it yourself against your desired outcome. For example, if you decide to add a patio to your home, you have two basic options. You can either take on the entire job yourself - designing the space, securing the permits, purchasing the materials, and building it yourself. Or you could hire an experienced contractor to handle everything for you.Your investment for the first option is largely in materials and a significant amount of your time, particularly if you are squeezing the patio project into a busy schedule that already includes work and family responsibilities. But how long will it take you to complete the job? What quality assurances will you have, especially if you've never tackled anything like this before? What might the short- and long-term consequences of the do-it-yourself approach be?On the other hand, what could a professional contractor bring to the table? While the financial investment might be slightly higher to cover labor costs with an experienced builder, the completion time is likely to be much shorter and you can hold the project to agreed-upon quality guarantees
For the best Offshore Software Development, i.e, software Development outsourcing and Offshore outsourcing services contact A-1 Technology,Inc,an offshore outsourcing company.
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TEN KEY FACTORS FOR SUCCESSFUL SOFTWARE AND OUTSOURCING AGREEMENTS
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Tuesday, June 28, 2005 |
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From: corporate findlaw
Clear Description of Software's Functionality. A customer needs the scope and description of the functionality of the software and services to be clear, complete, and unambiguous.
Meaningful Acceptance Criteria. Acceptance criteria should be objective, rigorous, and tailored to the needs of the customer. It should be possible to fail the test, quantify the failure, and determine what changes are required to pass the retest.
Meaningful Service Levels. A service level is the level of service that the software will provide. Service levels are often expressed in percentage terms. For example, a contract may require a service level of 100 transactions per second 95 percent of the time. A common mistake is to ignore the other 5 percent of the time. The contract should impose a service level on that remaining percentage; otherwise, the exception could provide a large whole for in performance obligations.
Accurate Metrics. Metrics are the standards and other criteria used to measure the performance of the software and related services. Continuing with the example in number three, the metric would be the criteria used to determine whether the software processes 100 transactions 95 percent of the time.
Meaningful Service-Level Credits. These credits are payments, offsets, or other forms of compensation that a vendor is obligated to pay the customer when it the software fails to meet service levels. These payments are what put teeth in service-level obligations.
Maintenance and Support Levels and Response Times. The safest assumption for the customer to make is that software or outsource services will not work completely. To compensate, the customer must receive complete and timely maintenance and support services with proper escalation provisions to be sure that the appropriately skilled vendor employees resolve the problems.
Avoid Too Much Shared Responsibility. To the extent possible, functions should be the responsibility of either one party or the other. If functions must be shared (for example, first-level support provided by the customer and higher levels of support provided by the vendor), then the demarcation lines should be drawn cleanly. When no one party is responsible, the task often will not get done properly.
Avoid Uncoordinated Amendments. A danger in complex information technology licensing transactions is that, over time, the collection of statements of work, work orders, amendments, and the like introduce inconsistent provisions with the result in extreme cases that it is not clear what the contract requires.
Avoid Paying Too Much Money Upfront. Paying most of the fees at the beginning of the contract reduces the customer's leverage, and in some cases, the key vendor employees will be assigned to other customers.
Termination Rights and Transition Services. A customer will want the right to terminate the agreement both for cause and for convenience. Termination for convenience is an important remedy when the customer downsizes or reduces the scope of the project. A customer will want the right to transition the software or services in house or to another vendor. The vendor will want to be paid for these services. The customer may consider paying a premium for transition services in order to obtain the benefit of an orderly transition.
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Offshore Outsourcing practices
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Monday, June 27, 2005 |
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As offshore outsourcing evolves beyond all the hue and cry about organizations adapting outsourcing seeking short-term benefits, there has been a steep learning curve associated with it's evolution. Some organization's have badly burnt their fingers by opting for short-term advantages at the cost of long-term benefits where as some have successfully managed to balance between the short and long-term benefits. Here are some of the best practices that have helped many of our customers build a robust outsourcing model over the years and practised by some of the world's leading companies who've successfully integrated outsourcing in their core business strategy.
a. Communicate openly about your outsourcing plans
Top management has to take the responsibility to explain the rationale behind it's decision to outsource. Apart from the obvious reasons to outsource like globalization, access to talent, reducing risks, reducing turnaround time, cost cutting etc., many companies have their raison d'être behind the outsourcing intiative that has to be clearly communicated to all the team members at appropriate time. It has been repeatedly seen that companies that encourage open communication within the organization about it's outsourcing plans are in a much better position to handle potential employee backlashing that could arise from the jobs moving offshore than it's less proactive counterparts. Today, many companies that intend to outsource are concerned about employee backlashing and the domino effect it produces. One of the most effective ways a company's top management can address this is by presenting a clear picture of the opportunities and challenges thrown open by globalization and technological advancements. Evolutionary forces act on businesses as they do on living beings and ultimately the fittest survive.
b. Involve the core front-line teams in the discussions
It is a good idea to involve the key front-line managers/ staff in the outsourcing discussions to give them a platform to express their feelings openly. Such discussions could bring out some of the previously unaddressed employee concerns and also helps management eliminate false rumours that could have evolved or possibly evolve during the initial stages of the outsourcing process. Further, core members of the organization want to be assured that outsourcing decisions will not have a negative impact on their goals.
c. Build a performance-driven culture
Performance driven companies usually have a policy of encouraging performance by eliminating non-performers on a periodic basis. Many companies that do not have a performance-driven culture can seize opportunity to build one by weeding out the non-performers and filling the void thus created by outsourcing those roles to an outsourcing service provider. There could be few more effective ways to emphasize the importance of performance within the organization and at the same time not taking any drastic measures that would destabilize the organization.
d. Maintain your brand equity in the talent/ business community. Do not underestimate the importance of sending the right message.
To avoid negative word of mouth within the talent/ business community, many companies have resorted to providing a well-balanced severance package for the key members whom they plan let go as a result of their outsourcing plans. This is very important for a company today as in this internet age, it takes only hours or minutes for a negative word-of-mouth to enter into the talent community, on which many organizations rely to build their core competence. This is especially critical for companies operating in niche areas where the talent pool is very limited and where most of the members are well connected.
e. Invest in intellectual capital
Today's smartest companies, inspite of all their outsourcing initiatives, continually invest in training and equipping their MIS/ IT staff. The core members of the MIS/ IT staff carry very valuable proprietary knowledge about the company's practices, personnel, and systems. These smart companies realize that success of their outsourcing initiative relies to a great extent on the intellectual capital of their existing employees. These companies liberally invest in building this intellectual capital through varied training programs ranging from core technical trainings to executive education programs.
f. Derisk
A well thought-out sourcing strategy is the best possible derisking model. A careful examination of the tangible and intangible benefits/ potential risks associated with outsourcing with respect to that organization's vision and business objectives cannot be overemphasized.
A long-term outlook is a prime requisite for the success of an organization's outsourcing initiative.
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Outsourcing in India In crisis over scam
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The Sun newspaper reported Thursday that a reporter posing as a businessman purchased the bank account details of 1,000 Britons -- including customers of some of Britain's best-known banks -- for about $5.50 each.
The newspaper's report, which was widely covered in the Indian news media, has renewed criticism that outsourcing firms have failed to erect adequate protections against fraud in their zeal to take advantage of the booming demand from foreign companies seeking to lower costs by shifting some office operations abroad.
The incident also has played into the hands of workers and politicians in Britain, the United States and other developed countries who see the outsourcing phenomenon as a threat to employment and prosperity at home and are eager to find ways to discredit it.
The report comes on the heels of another scandal in which several Indian outsourcing workers in the western city of Pune are alleged to have used their positions to steal $426,000 from New York-based customers of Citibank.
"This is California" during the Gold Rush, said Shankkar Aiyar, a business journalist and senior editor at India Today magazine who has written widely on outsourcing. "Everybody who sees an opportunity sets up shop. They want to start fast, they've got a contract in hand, and some of them are taking shortcuts."
India has no monopoly on such fraud. This month, MasterCard International Inc. announced that more than 40 million credit card numbers belonging to U.S. consumers were accessed by a computer hacker who breached security at a processing center operated by another company in Tuscon.
India's National Association of Software and Service Companies, known as NASSCOM, has said the industry was already taking a number of steps to promote better security, including the development of a national registry of outsourcing workers that will help screen out potential criminals. Outsourcing companies in India typically bar workers from downloading or printing information, and often from carrying cell phones or even pens into their work areas.
"The problem is not unique to any single nation," the group said in a statement Thursday. "It is one that can affect any country, and each of us has a responsibility to take on the criminals."
The Sun identified the outsourcing worker at the center of its sting as Kkaran Bahree, 24, a computer expert and college graduate who lives with his parents in New Delhi. It said he provided the newspaper's reporter, Oliver Harvey, with "account holders' secret passwords, addresses, phone numbers and details of their credit cards, passports and driving licenses." The newspaper said that some of the information was contained on a CD and that Harvey's three meetings with Bahree had been secretly recorded and filmed.
The Sun said that Bahree "gathers supposedly secret information from corrupt call center workers in Delhi" and that it had verified the authenticity of the information with "a security expert." The newspaper said it had given investigation details to the City of London police.
Bahree could not be reached for comment Friday. But in an interview with the BBC on Thursday, he denied any wrongdoing, saying he had been asked by an associate to give a CD to the Sun's reporter, did not know what it contained and had not received any payment.
The newspaper said Bahree had worked for several years at Daksh eServices, now a subsidiary of IBM, and currently works for an outsourcing company called Infinity eSearch in the fast-growing New Delhi suburb of Gurgaon.
At a news conference Friday, Infinity's managing director, Rahul Dutt, said the firm had no banking clients in Britain and did not handle financial information for clients, according to the Press Trust of India news service. Dutt said Bahree has worked at the company for about three months and had been given until 5:30 p.m. Friday to give an explanation "about his alleged role in the scam." Calls to the company's Gurgaon office went unanswered late Friday afternoon.
India's outsourcing industry performs a range of customer-service and other back-office functions for Western and multinational firms in areas such as banking, insurance and health care. The industry is creating jobs at the rate of nearly 100,000 a year, and its revenue is growing at more than 40 percent annually, according to NASSCOM. But analysts warn that the industry's rapid growth has stretched the supply of educated English speakers, prompting some companies to lower their hiring standards.
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Offshore Outsourcing trends
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Thursday, June 23, 2005 |
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Let us say first that much of the fate around offshore outsourcing has already been sealed. How could this be? There are new reports that near- and off-shore outsourcing does not save as much money as many people assumed. Some reports suggest that quality is a continuing problem, and others complain about language barriers, competing processes and the management challenges that especially plague many off-shore outsourcing projects.
The fate may already be sealed for several reasons. First, the number of management information systems (MIS), information systems (IS), computer science (CS) and computer engineering (CE) majors has fallen so dramatically over the past few years that we’re likely to lose an entire generation of replacement technologists if present trends continue – and they show every sign of doing so. So as the previous generation continues to gray, there will be precious few new ones to keep the skills pipeline full. The obvious outcome is increased demand for the skills – wherever they happen to be.
A second trend that will fuel the demand for more offshore outsourcing is standardization and its cousin, commoditization. The industry is making increasingly less variant stuff work together. While Web Services and service-oriented architectures (SOAs) represent impressive technology they also represent freedom to those who deploy and support technology.
Vendor consolidation is also fueling standardization and commoditization, and if you believe the impact that SOAs will have on software development, support and licensing, the stage is set for the massive de-centralization of cooperative software components. If this playing field truly levels itself out, the door will open even further for outsourcers who will master the new architectures (as a natural extension from where they are now in applications development and integration).
The third trend to watch is “the end of corporate computing,” or the desire to buy services and rent applications rather than deploy and support them in-house. Nick Carr is at it again. In the Spring 2005 issue of the Sloan Management Review, he predicts the end of corporate data centers and the rise of “utility computing.”
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Managing Software Project
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The outsourced software development involves a key decision – primarily a management decision – Should you manage the project in-house or Should you outsource the complete product development? Both of these approaches to outsourced software development have benefits if you have the right outsourcing partner.
Typically, if the project management and solution architecture is managed in house using internal resources, it involves a very close resource management. Project manager takes the responsibility of managing the software development direction and ensuring efficient use of development resources.
The software development is divided into definable tasks by the internal team, and performance is measured against the individual tasks.
The second approach, where the offshore vendor provides complete software development including software architecture and project management services, involves interaction at the functional level. It some times involves a detailed product specification phase – where a project manager spends significant time with the business and interface with the offshore team.
The vendor as well as the client, in such cases, shares the responsibility and risks of product development. It involves an interaction at the functional level as opposed to technical level.
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Outsourcing - a New Surge
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From:seguejobs
Recent trends clearly indicate that companies are generally avoiding traditional outsourcing risks and forming a deeper relationship with their offshore partners by setting up dedicated centers. A dedicated center is an extension of an organization abroad.
The dedicated center devotes all its efforts to the host organization and, to maintain consistence with the organization's standards, it follows their culture and methodologies to produce immediate results. The center enhances overall productivity, and more importantly, it results in considerable long-term cost savings.
Countries like
For the best Offshore Software Development, i.e, software Development outsourcing and Offshore outsourcing services contact A-1 Technology,Inc an offshore outsourcing company
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Outsourcing + Insourcing Key to Smartsourcing
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From:seguejobs
In today's high-speed global business environment, every organization is out to maximize its profits, enlarge its market share, and above all, put a check on ever-increasing costs. Management gurus are undertaking every effort and every possible mantra is being applied to re-think and re-adopt new processes, especially the buzzwords "outsourcing" and "insourcing."
Outsourcing is the process of procuring services or products from an external service provider with a view to curb costs, replace in-house capabilities, and thereby reduce the time period of projects. Outsourcing is thus a full transfer or delegation of an organization's facility management functions to an external firm. Outsourcing has emerged as an effective tool to revamp the strategies and benefits of business in a financially viable and pro-active manner.
Fundamentally speaking, outsourcing may be classified into two types: traditional outsourcing and
a. Traditional outsourcing means that the staff of the organization does not perform the same jobs or tasks. Here, tasks to be performed are identified and the service provider usually hires the staff. For instance, IT outsourcing may include a transfer of responsibility for management of data centers and networks. In the field of facility management, the people working as property managers might become the staff of a facility management company.
b.
For the best Offshore Software Development, i.e, software Development outsourcing and Offshore outsourcing services contact A-1 Technology,Inc an offshore outsourcing company
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Offshore Outsourcing
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Experienced executives agree that offshore outsourcing almost always sows uncertainty in internal personnel. It can result in layoffs and budget reductions among IT middle managers. The silver lining for IT managers is that there are opportunities for those who are prepared to embrace change and help their companies face the challenges of dealing with outsourcers - whether those external providers are in Bangalore or Boston.
Other technology and business leaders agree that when it comes to offshore outsourcing, companies need all the talent they can muster to do it right.
You need a team to manage the outsourcers, a program management office or an offshore development management center. offshore outsourcing program management involves a variety of tasks and skills, which include the writing of service-level agreements; analysis of contracts; documentation for how processes should be managed; and creation of liaison roles to ensure effective communication among IT, the business side of the company and outsourcers.
Of course, not all IT managers have access to mentoring programs. However, IT middle managers in any company can develop their project management chops.
Be process-oriented, focusing on managing resources. Analyze what you do, apply metrics to what you do, break out costs and inventory skills. See how you can do things faster, better.
People involved with help desks and network management are in a good position to hone their communications and negotiating skills since they need to contract, for example, for services for bandwidth and deal with a complex network of relationships to have systems installed.
Ultimately, outsourcing consultants and top executives advise IT managers to prepare to embrace change, and take the initiative to develop the skills required to deal with offshore outsourcing.
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Software Testing: The next outsourcing boom sector
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Wednesday, June 22, 2005 |
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From: blogtaragana
Indian Outsourcing industry is increasingly turning towards software testing. In fact India
Reuters reports on companies like Wipro, Infosys and Aztech who are experiencing boom in this sector.Wipro has jumped four-fold to 2,400 in two years. In the nine months to December, revenue grew 90 percent to $64 million, three times the industry average.
Software glitches are estimated to cost nearly $60 billion a year in the
For the best Offshore Software Development, i.e, software Development outsourcing and Offshore outsourcing services, contact A-1 Technology, Inc, an offshore outsourcing company
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Indian Outsourcing Firms Make Global Push In China, America
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Tuesday, June 21, 2005 |
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From: outsource360
While U.S. workers and corporations continue to digest the idea that college grads on the other side of the planet can do the same jobs for one-third the price, the very firms that have made these shifts possible are heading to new countries — and, in some cases, circling back to the U.S.
Cognizant Technology, (CTSH) Infosys, (INFY) Tata Consultancy Services and Wipro, (WIT) companies whose heavily India-based staff develop and maintain big IT systems for their North American and European clients, have started to set up operations in other cheap-labor locales such as China and the Czech Republic.
At the same time, they are recruiting more experienced U.S.-based workers to offer the business consulting typically provided by firms like Accenture (ACN) and McKinsey.
Stoking these ambitions are growth rates that outshine those of their
Take Bangalore-based Wipro. With $1.9 billion in annual sales, it's just one-tenth the size of EDS. (EDS) But Wipro's market capitalization tops that of its
Strong sales and stock prices have given the Indian firms momentum to expand in countries like
Indian firms have invested close to $50 million in
For the best Offshore Software Development, i.e, software Development outsourcing and Offshore outsourcing services, contact A-1 Technology,Inc,an offshore outsourcing company.
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Eye on offshoring: Accessing the suppliers
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Sunday, June 19, 2005 |
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From: computerworld
Recognizing the current state of flux of offshoring, key characteristics that must be understood in detail for each supplier under consideration include:
- Multinational capability. Are services located in one country or even one city, or are they diverse on a global scale?
- Partnerships/use of third parties. What are the key partnerships the supplier has formed? Does it have offshore partners it will outsource work to?
- Turnover rate. Many call centers in
- Technical infrastructure. What is the composition of the supplier's technical infrastructure and support structure? Is its support plan standards-based
- Business continuity and disaster recovery. What is the plan, and has it been evaluated lately?
- Security. What is the security plan, and has the supplier recently conducted a risk assessment? If so, how often does it assess its security posture?
- Service-level agreements. Does the supplier tie all of its SLAs to the delivery of the product, or is the
Different companies will have different comfort levels with the answers to these key characteristics. To reinforce the point; the key to successful offshoring is a well-defined, executable strategy and governance plan. Using a supplier-independent consultancy to select the most responsive and responsible supplier of offshore service will help guarantee success.
For the best Offshore Software Development, i.e., software Development outsourcing and Offshore outsourcing services contact A-1 Technology,Inc,an offshore outsourcing company
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Outsourcing in India: Advantage
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From: outsourcing2india
Indian companies are seen as preferred partners all over the world. The natural resource of
The Indian advantage lies primarily in the educational and technical qualifications of the personnel, who are often more qualified than the people working in the parent locations. A survey conducted in 2002 by NASSCOM (National Association of Software and Service Companies) showed that an India based ITES-BPO center in the banking and financial service sector, performs better than a UK or US based facility on significant factors such as the number of correct transactions/total umber of transactions, total satisfaction factor, number of transactions per hour and the average speed of answers.
The survey also says that 45 percent of Indian service providers have certifications like Six Sigma (a disciplined, statistical quality control method that measures the number of defects compared to the opportunities to make defects) and CMMI ( Capabilty Maturity Model Integration - which is a process improvement method that provides a set of best practices that address productivity, performance, costs, and customer satisfaction.). Moreover, a lot of organizations are upgrading their quality standards to from the ISE 9000 to the new ISO 9000:2000, and from the CMM framework to the new CMMI framework.
Pune is a fast emerging outsourcing destination. This fast emerging info hub fast has a large number of quality educational institutions and universities. Today its resources and statistics back its claim for the numero uno destination for IT investments. The setting up of IT Parks with good connectivity, phone lines and electricity and a robust telecom infrastructure is another reason for why Pune is the new IT destination. The availability of huge land in prime locations coupled with the abundant trained manpower has prompted many companies to open office in Pune.
The Indian model ensures that it works in systematic manner. IT systems - production servers, mainframes, and application systems - rarely reside in
For the best Offshore Software Development, i.e., software Development outsourcing and Offshore outsourcing services contact A-1 Technology, Inc,an offshore outsourcing company.
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Offshore outsourcing strategy
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Friday, June 17, 2005 |
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From: cnet news
The reality is that offshoring is another form of trade, and trade brings both opportunities and challenges. Benefits have always exceeded costs, however, and our great imperative is to maximize the former while minimizing the latter. Specifically, we must do the following:
- Enforce current and future trade agreements.
- Enable global flows of goods, services, capital and people.
- Promote lifelong learning environments, efforts and skills.
- Identify ways to encourage saving and to maintain health coverage during work force transitions, but ways that don't restrain future hiring.
- Ensure our business climate encourages entrepreneurship (access to capital, employer flexibility, and more rational regulations and torts).
- Improve our infrastructure to maximize companies' and workers' productivity.
- Ensure adequate resources for educational innovations that work.
For the best Offshore Software Development, i.e., software Development outsourcing and Offshore outsourcing services, contact A-1 Technology, Inc, an offshore outsourcing company.
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Procurement outsourcing
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From: information week
Over the past year, ICG Commerce has seen an unprecedented level of interest in procurement process outsourcing. Many industry thought-leaders have launched comprehensive studies on the topic, reporting that performance has exceeded early adopter's expectations and are projecting 15 to 50% growth over the next three years. Trade media and educational organizations that have historically avoided the topic are now approaching it proactively. But perhaps the most direct evidence of a growing trend toward procurement outsourcing from ICG Commerce's vantage point is the 10X increase in the number of inquiries and RFPs received for outsourcing services.
While this increased interest in procurement outsourcing is clear and the value proposition can be compelling, many companies still seem to struggle to understand procurement outsourcing and determine the appropriate path forward for their own organization.
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Software outsourcing industry: trends
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From: oocenter
Order books of software exporters are full and the guidance for the remaining period of the year looks positive. CEOs talk of
For the best Offshore Software Development, i.e., software Development outsourcing and Offshore outsourcing services, contact A-1 technology, Inc, an offshore outsourcing company
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Business continues to see strategic benefits of outsourcing
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